US says Israeli freeze of PA taxes ‘unfortunate’

State Department: Economic cooperation between Israel, Palestinians is important

US State Department Spokeswoman Jen Psaki (YouTube, screen capture)
US State Department Spokeswoman Jen Psaki (YouTube, screen capture)

US State Department spokeswoman Jen Psaki said Friday that an Israeli decision to freeze the transfer of tax funds it collects for the Palestinian Authority would be “unfortunate.”

“We’ve seen these press reports, but we have not seen an official public announcement by the Government of Israel,” Psaki said in in her daily briefing to reporters. “That said, we would regard such a development as unfortunate.

“We believe that the regular transfer of the Palestinian Authority’s tax revenues and economic cooperation between Israel and the Palestinian Authority has been beneficial and is important to the well-being of the Palestinian economy,” she said.

An Israeli government official announced Thursday that Israel will significantly cut the tax funds allocated to the Palestinian Authority in retaliation for the Palestinians pushing to sign up for more recognition from international agencies and treaties. That came after Israel failed to release Palestinian prisoners as promised and moved forward with more settlement construction in land Palestinians want for their future capital.

The money kept by Israel will be deducted from outstanding Palestinian debts, he said.

“The step was taken in light of continued Palestinian unilateral measures with the UN treaties, which constitute a clear violation of the agreements between Israel and the PA,” he said.

On Wednesday, a senior official warned about the imminent drastic tax cuts, but said the suspended funds were “the money they spend on terrorists and their families.”

“This step would be less dramatic than cutting entirely our monthly tax payments to the PA, but it would be step that would be in place,” he said.

On Friday top Palestinian negotiator Saeb Erekat called the decision “piracy…it cannot be maintained.”

Israel collects about $100 million a month in taxes for the Palestinians. It isn’t clear how much would be withheld or for how long it would go on.

Also on Friday senior Israeli officials said the likelihood that derailed Israeli-Palestinian peace talks would get back on track before expiring at the end of April is virtually zero.

“There is no chance of the negotiations restarting in the coming weeks,” unnamed officials were quoted by Channel 10 as saying.

AFP and Marissa Newman contributed to this report.

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